Connect with us

Hi, what are you looking for?

Business

Mastercard Economics Institute: 2022 Economic Outlook Defined by Digital Resilience and a Return to the ‘Experience Economy’

Ahead of the pandemic’s second year milestone, the Mastercard Economics Institute released today Economy 2022, a global outlook for the coming year based on critical trends as seen through the lens of the consumer.

The report reveals how five fundamental factors — savings and spending, supply chains, digital acceleration, global travel, and a growing list of economic risks — will continue to shape the global economy.

Our key findings include:

Savings & Spending*: Consumer spending of built-up savings could contribute an additional three percentage points to global GDP growth in 2022. Household saving rates nearly doubled in 2021. How quickly or slowly consumers spend from their savings will have a ripple effect on the global economy.

Supply Chains: A record-breaking 27-year rewind in the household spending shift from goods to services rotates back – already six percentage points below the peak. The pandemic sparked spending growth on goods from 39% to around 47% at its peak, roiling the services economy while burdening supply chains. With cupboards bursting, we expect the balance to normalize in 2022 as borders open and services become more accessible and desirable again.

Digital: 20% of the digital shift in retail stays put – reshaping how and what consumers buy. E-commerce subscriptions gained traction in 2021 as nearly 88% of countries across 32 markets saw a surge in subscription services compared to the previous year. Notably, car companies, virtual workout partners, bike rentals and pet services are among a slew of businesses benefitting from this model.

Travel: Leisure travel recovery continues as international travel opens up, with medium- and long-haul flights to gain ground in 2022. The return to travel in 2021 was on full display on our roadways and in airports, but continued growth hinges on containing virus variants that drive travel bans. We saw a swift rebound in domestic and short-haul international travel (under 1,000 km), medium-haul travel (under 2,900 km) lifted by fewer restrictions, while long-haul travel trails behind.

Risks: Risks remain with the potential to disrupt the global economy. New COVID variants like Omicron pose the biggest immediate risk, but we’re keeping an eye on nearly a dozen additional risks that have the potential to derail recovery, including a sharp recalibration of housing prices that have appreciated 66% over the past two years, a surge in oil prices, fiscal cliffs in advanced economies, and international tariff wars.

“The past year was not the return to normal that many yearned for, but collectively, we have made tremendous progress,” said Bricklin Dwyer, Mastercard chief economist and head of the Mastercard Economics Institute. “Globally, economic growth, vaccine advances, and digital transformations that have made businesses large and small more resilient, continue to shape the future. It is against this backdrop that we anticipate consumer demand — and spending power — to grow and the experience economy to reemerge next year.”

*Methodology

The Mastercard Economics Institute draws on aggregated and anonymized sales activity in the Mastercard network among other sources to develop a measure of the quantity and prices of goods vs services consumed for economies throughout the world.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

ad

You May Also Like

News

Russia’s Ministry of Health has unveiled a revolutionary development in cancer treatment—a personalized mRNA-based cancer vaccine that will be distributed free of charge beginning...

News

Jigawa State Government has uncovered 6,348 ghost workers following a staff verification exercise conducted across the state. Mr. Sagir Musa, Commissioner for Information, Youths,...

News

Nigerian Communications Commission (NCC) has hosted a virtual stakeholders’ forum to discuss the draft Application-to-Person (A2P) licensing framework. The event, held on December 20,...

News

In a significant move to bolster Defence Health Services and strengthen the partnership between the United States and Nigeria, the Honourable Minister of State...